Liquidity analysis

The liquidity needs of the banking system result from the minimum reserve requirements imposed on euro area credit institutions and from autonomous factors. which are normally beyond the direct control of the ECB. Such factors can be banknotes in circulation and government deposits with some national central banks.

The ECB normally aims to satisfy the liquidity needs of the banking system via its open market operations.

Finally, counterparties can access the Eurosystem’s standing facilities with an overnight maturity.

Reflecting non-standard monetary policy measures

The regular publication of figures relating to the liquidity position of the euro area banking system vis-à-vis the Eurosystem also takes into account all non-standard monetary policy measures that have been used since August 2007:

Covered Bond Purchase Programme: The liquidity provision coming from the covered bond purchase programme is displayed under open market operations.

Covered Bond Purchase Programme 2: The liquidity provision coming from the second covered bond purchase programme is displayed under open market operations.

Securities Markets Programme*: The liquidity provision coming from the securities markets programme is displayed together with autonomous factors under an item called “Net liquidity effect from autonomous factors and SMP”. The liquidity-absorbing operations that are carried out to sterilize the liquidity provided through the SMP are shown under open market operations.

Foreign exchange swap operations: The euro liquidity absorption resulting from the provision of foreign currency to Eurosystem counterparties via FX swaps was discontinued in January 2010. Until June 2009, this euro liquidity absorption was displayed under autonomous factors, while thereafter is has been part of outstanding open market operations.

The benchmark allotment amount for main refinancing operations, takes into account the liquidity effect of all non-standard measures. For illustrations on the calculation of the benchmark allotment amount, please see the dedicated document “ Calculation of the benchmark allotment in the main refinancing operations ”.

* Outstanding amounts of liquidity provided under the Securities Markets Programme can be found on the Weekly Financial Statement of the Eurosystem as well as in the section Asset purchase programmes.